Macquarie reports $604 million half-year profit

Macquarie Group has managed to stay solidly in the black despite the recent market volatility, reporting a net profit for the half-year to September 30, 2008, of $604 million.

However, it is a measure of the tougher environment that the profit was 19 per cent below that achieved during the corresponding period last year.

Commenting on the result, Macquarie Group chief executive Nicholas Moore described it as a sound result that he believed underscored the group’s funding and capital position.

Nonetheless, the results revealed that operating income had fallen 37 per cent to $3 billion and that earnings per share had decreased 46 per cent to $2.17.

“While the extreme market conditions have led to a number of write-downs and one-off costs in the latest half year, the underlying performance of the Macquarie business has been solid,” Moore said.

He said the result had been achieved despite substantial one-off costs and write-downs, which totalled $1.14 billion and which had a net profit impact of $395 million, including the sale of the Italian Mortgages portfolio, the write-down of funds management assets and other co-investments, loan impairment provisions and impairments recognised on trading positions.

Moore said that among the key drivers for the result were reasonable corporate finance and advisory deal flows and record volumes in foreign exchange.

Broken down into operating groups, the Macquarie announcement revealed that both the Banking and Financial Services Group and the Macquarie Funds Group had struggled, with wrap funds under administration down 7 per cent from March and declining equity values and redemptions from Asian retail investors leading to a decline in assets under management.